SINGAPORE (Dec 11): Pine Capital, the financial services group specialising in fund and asset management services, is acquiring a 51% stake in Hong Kong-based asset management firm for HK$2.55 million ($0.45 million) in shares.
Incorporated in Hong Kong in June 2010, Silver Tree Holdings is licensed to manage clients’ portfolio of securities or future contracts on a discretionary basis and manage multi-strategy portfolios. The target has an issued and paid-up share capital of $7.1 million consisting of 40.4 million shares.
Pine Capital says the acquisition proposed acquisition will broaden the group’s client base, procure new sources of revenue for the group and allow for the group to leverage on the target to break into the Hong Kong market.
For the year ended Dec 31, 2017, Silver Tree posted a net loss of HK$10.8 million and had a net tangible asset value of HK$9.5 million as at end 2017.
Pine Capital’s core business of the group is currently conducted through Advance Capital Partners Asset Management (ACPAM), in which the company holds 51% shareholding interest.
“It is the group’s intention to enhance its service capacity in the asset management industry by accessing broader sources of capital flows,” says Pine Capital in a Tuesday early morning regulatory filing.
The seller of the Silver Tree shares is David Sarkis, who currently heads Silver Tree's investment management team and is its sole shareholder.
The consideration for the purchase will be paid by the issuance of 165.7 million new Pine Capital shares at 0.27 cents each. This is a 170% premium to Pine Capital's volume-weighted average price of 0.1 cent on Dec 7.
The new shares represent 2.84% of Pine Capital's outstanding issued shares as at Dec 7. However, the company had proposed a placement of 799 million new shares at 0.27 cent each on Nov 27, and has taken a convertible loan facility that could be converted into one billion new shares at 0.27 cent each.
Including the placement and assuming the convertible loan is fully converted, the consideration shares for the Silver Tree acquisition will represent about 2.1% of Pine Capital's enlarged share base.
The acquisition will be made in two stages. Pine Capital will acquire the first 9.9% stake in Silver Tree upon the successful completion of due diligence and relevant approvals. The remaining 41.1% will be acquired upon obtaining further approvals, including from Pine Capital shareholders.
